Gelsinger’s Systems Foundry Business Model
G. Dan Hutcheson
The Chip Insider®
Gelsinger’s Systems Foundry Business Model: The Foundry/IDM model is dead. Long live the Foundry model. In the beginning, there was the IDM model. The world didn’t call it that at the time because there was no foundry model to contrast it with. To understand Pat’s strategy, a refresher on the history of semiconductor business models may be helpful. So the industry shifts gear from Systems on Chip to Systems in Package, or Heterogeneous Integration, or Chiplets, or Disaggregated Design, or some other branding that depends more on who you’re talking to than what they are actually doing. It’s all the same destination, it’s just that the industry has yet to settle on a common name. Whatever it’s called, there is a decadal cadence to these business models that are causally driven by the cadence of Moore’s Law and the 2-node cadence of fab costs. Herein lies a new semiconductor business model challenge that Pat Gelsinger sees: not only are the technologies different, the companies that make them have different core strengths that can’t be easily duplicated. The fracturing of the industry’s business model was originally driven by dual challenges of the rising density and the cost of a fab. So is this truly a process of decadal cadence? I’ll let you can make that judgement. What I do know is the causal nature of its driving forces is the same. As for Intel, the term ‘systems foundry’ is far clearer, as it implies a foundry to make systems, which can be easily laid out as done above.
Maxims: Problems are markets and solutions are products. One of the biggest mistakes companies make in product development is in not understanding this principle. You see it all the time, with marketing professionals foolishly referring to their product as a solution, when there is no problem that it comes close to solving. When they fail, the cliché used is often, “it was a solution in search of a market.” But this misses mark. Obviously the developers must have thought...
For Your Reference: Now you have a chance to see me. I have accepted an invitation to speak at the NIST colloquium series Friday, September 16th, 2022, 8 AM PT/11 AM ET.
“If you don’t like what’s being said, change the conversation” — Don Draper, Mad Men
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